Poverty aids takers, not creators

A few years ago, a couple of local politicians made an extraordinary offer. Come to Hawke's Bay and invest, they said, for we have low wages and conditions.

This thinking imagines that economic success comes not from the creative dynamism of our own local culture and enterprise, but when some outside ''investor'' comes into our place like some latter-day colonist.

All the better to be cheap. Hail cheap ''human resources'', cheap environmental ''resources'' (even free, if you can get it), cheap compliance costs. Hail their ''freedom'' to take the land and whatever lies beneath.

This is a seriously visionless view of our commercial world, whatever the propaganda of jobs and prosperity for all.

It was also more confirmation of what we have known for some time: there are many men in suits who see the wage rates of Bangladesh as our economic goal. Let us have poverty. Poverty is good for business. And let's put the blame on the victims, make it a sport if we can. Perpetuate the myth of the undeserving poor and laud those who drive a Maserati.

Seriously, this approach to life and the economy is very dumb.

It degrades the very basis of a strong local economy. It is morally and intellectually bankrupt because child and family poverty is our poverty, just as the degradation of our natural systems is our degradation. It is myopic because it kills opportunity, creates costs, and makes life worse for local business.

It is deluded because it promotes the takers and the short-term wheeler-dealers who work in boardrooms, and makes life harder for creative enterprises that have smoko tables.

A kaumatua once told me that people have lost hope. We were comparing the feeling of optimism and opportunity we once had with the feeling today that life is now different. When people lose hope and optimism, then society is worse, and the realisation of talent stalls.

This loss of cohesion and belonging is the first and major cost of poverty. When you make policies that reduce hope we degrade our localised ''social capital''; the very thing that creates economic prosperity - trust, participation, belonging, social and individual responsibility, justice and caring.

When you feel good about life, you meet, you trust in justice and each other, you exchange ideas, discussion flows - and things happen. Enterprise leads to more enterprise, hope to hope, a virtuous circle.

This is a sociological phenomenon understood by the best economists, those who focus on people-led development. Build a community, a team, not a mechanical factory staffed by unthinking and obedient Orcs.

To compound the idiocy of crushing potential, we get costs instead. The personal cost of misery when children are sick with preventable diseases. The public cost of having an ambulance at the bottom instead of cheaper prevention. More mental health problems. Wasted education investment. Violence, theft, police and prisons all increase.

We are poorer, though the GDP may rise with all the extra work we need to do to repair all the damage.

The last negative effect of poverty is in reducing economic demand upon which our local firms depend; less money to cycle and multiply, a vicious cycle. The Great Depression is a classic example of what happens when you reduce demand to a trickle.

But we had our own mini-example when New Zealand's local economies tanked after National Party finance minister Ruth Richardson stripped $1billion off welfare support in her 1991 ''Mother of all Budgets''.

Poor people, who tend to spend locally, could no longer buy, and so those enterprises laid off staff, compounding the reduced spend and the layoffs. And big-box retail came in to compound the problems of local business.

Richardson made the lives of the already poor even more miserable because economic fundamentalists in Treasury believe in the bollocks that people ''choose'' to be poor.

So let us start a conversation. Poverty is a choice we make; a very bad one. It is both a symptom of a stupid economic creed and a key driver of our own material and spiritual poverty.

Poverty suits the takers, not the creators. It is not the consequence of some moral or meritorious karma; it is a clear sign of an economy in trouble, and a need to think and discuss new ideas.

-Chris Perley is an affiliated researcher at Otago University's Centre for Sustainability with a governance, research, management and policy background in provincial economies, rural communities and land use strategy.

Comments

Most people talking like this wear shirts from China, shoes from Taiwan, and use iPhones manufactured by Foxconn. I have yet to meet the person willing to pay double the price “to support a local economy”. Economies work because risk takers buy cheaply, and sell at a profit.

I choose to live in a quaint little New Zealand town, where there is little work. What work there is, is hard, honest, and lowly paid. I could live in Hong Kong and make many times more money, but prefer my lifestyle here.

When investors come to town, to exploit our cheap labour, I welcome them. Because it is hard, honest, work that gives me what I want, the ability to live in rural New Zealand. It gives them what they want, cheap labour. It gives the market what it wants, affordable products within a sustainable business model.

When rural wages equal city wages, business investors will not come just to enjoy the additional transportation overheads.

The way out of poverty is learning to create what other people want to buy, not by insisting they pay you lots of money “because you deserve it”. People acquire hope from contributing to others. The more you contribute, the more choices you have.

Oh, rubbish. First, you play the tired hypocrisy card, then reveal a woeful ignorance of Civil Society. Economy is Society. Connectedness makes poverty bad for the Economy, for business. Wage rates were kept low to attract exploiters. Like it or not, those days are over. 'Lifestyle' choice does not mean a choice of subsistence living.